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Data protection has always been important to Apple. With the introduction of app tracking transparency (ATT) in April, the company went one step further and enables users to decide for themselves which apps they can track online. Apple’s foray into data protection has cost the social media companies Facebook, Twitter, Snapchat and YouTube dearly. A market analysis of the Financial Timesthat advertising revenue here has declined by nearly $ 10 billion since the launch of ATT.
App tracking transparency meets social media companies
According to the Financial Times and ad tech company Lotame, Facebook, YouTube, Twitter, and Snapchat revenues fell 12 percent in the third and fourth quarters, for a combined total of $ 9.85 billion.
The decline in sales is a continuation of earlier findings shortly after the introduction of ATT. As of July, it was suspected that ATT had caused a major drop in revenue for iOS advertisers. According to the latest data, of the four companies, Facebook experienced the largest decline in the advertising market due to its size, said to amount to over $ 8 billion. Snapchat, on the other hand, did the worst in terms of percentage, which can be attributed to the concentration on smartphones.
Mike Woosley, COO of Lotame, says advertisers are seeing less success when promoting to iPhone users because most of them have opted out of social app tracking. For example, an underwear brand targeting men has previously attracted a customer for a $ 5 advertisement aimed at 1,000 men. “To reach 1,000 men, you have to show the ad to 2,000 people because suddenly you no longer know who is a man and who is a woman,” says Woosley. As a result, “advertising costs double and the lost income is 50 percent”.
The loss of tracking has forced companies to revise their advertising systems to deal with the privacy-friendly idea. According to adtech consultant Eric Seufert, however, it could take a year to develop new tools and frameworks because they “have to be developed from scratch and extensively tested before they can be used by a large number of users.”
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